ISLAMABAD: Despite higher-than-estimated foreign inflows, the government had to limit the size of its Public Sector Development Programme (PSDP) to Rs796 billion to divert about Rs247bn for financing of deficit in the recently concluded 2017-18 fiscal year.

The Planning Commission on Friday published data about the PSDP for 2017-18, which showed the government had estimated a foreign exchange component (FEC) of Rs162bn in the Rs1,001bn package. However, the foreign inflows had touched Rs204bn by the end of May.

On the other hand, the authorities allocated a local financing component of about Rs839bn in the budget for PSDP, but they actually disbursed only Rs593bn, showing a diversion of about 30 per cent of the funds for budget financing.

As such, the total PSDP spending came to Rs796bn at the end of the fiscal year on June 30, which was almost 21 per cent lower than the budgeted amount of Rs1 trillion.

The Planning Commission said the government released only Rs187bn for the federal ministries during the entire year against an allocation of Rs302bn, a disbursement of less than 62pc. This meant that about 38pc or (Rs115bn) out of the allocation for the ministries had been surrendered to the Finance Ministry to minimise budget deficit.

The government had estimated an FEC of Rs17.5bn in the development projects of the federal ministries but only Rs12.8bn was received from abroad. In contrast, the government had estimated foreign inflows of Rs141bn for two corporations involved in the China-Pakistan Economic Corridor (CPEC), but actual collections exceeded Rs185bn, a surplus of 31pc.

Major spike in foreign assistance was witnessed in the case of National Highway Authority (NHA) which received Rs139bn, mostly from China, against the budgeted amount of Rs86bn. The power sector, on the other hand, received Rs47bn against an allocation of Rs56, a shortfall of 16pc.

Most of the funds were disbursed by the PML-N government before May 31 and only about Rs10bn was released after the caretaker government took over. These payments had become due against work orders already issued during the tenure of the political government for critical projects.

Last year, the government had disbursed about Rs740bn against a budgetary allocation of Rs800bn, showing a utilisation rate of about 93pc.

As a result of the higher foreign inflows, NHA was disbursed a total of Rs341bn on completion of the 2017-18 fiscal against allocation of Rs325bn in view of its involvement in execution of a series of road projects under the CPEC.

The power sector, another major component of the CPEC, consumed about Rs47.5bn against an allocation of about Rs61bn. Together, the NHA and the power sector were provided Rs388.5bn against allocation of Rs386bn.

The special areas, including Azad Kashmir, Gilgit-Baltistan and the tribal areas, were disbursed Rs66.5bn, compared to their combined allocation of Rs71bn. The tribal areas took away Rs26bn, slightly short of the targeted amount of Rs26.9bn. Azad Kashmir was provided Rs24.6bn against an allocation of Rs25.8bn while GB received Rs15.8bn against the allocated share of Rs18.3bn.

A major cut of 62pc was made in the case of the national health sector and regulations and coordination division which was provided only Rs18.8bn against an allocation of Rs48.7bn.

While the PML-N government made 100 per cent disbursements of Rs30bn allocated for the PM’s Global Sustainable Development Goals, almost the entire Rs12bn earmarked for clean drinking water remained unutilised. On the other hand, Rs11.7bn was spent on energy schemes against an allocation of Rs12.5bn.

As such, a total of Rs720bn (83pc) was disbursed for the core PSDP projects having an allocation of Rs866bn, thus securing a saving of about Rs146bn or 17pc.

Another major saving of about Rs38bn was secured out of allocations for special development programmes for settlement of temporary displaced persons and security arrangements as Rs62bn was disbursed against an allocation of Rs90bn.

Published in Dawn, July 7th, 2018

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